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MOTO R AN D EQUIPMEN T MANUFACTURER S ASSOCIATIO N TESTIMON

Y A T EP A HEARIN

G O N REQUES T B

Y CALIFORNI

A FO R A SECTIO

N 209(B ) WAIVE

R OCTOBE R 17 , 199 5 Presente d by : Pau

l Haluza , Directo r o

f Governmen

t Relation s an

d Publi c Affairs , MEMA , an d Mar c Fleischaker , Counse

l for MEM

A W e com e her e toda y t o expres s th

e oppositio n o

f th e Moto r & Equipmen

t Manufacturer s Associatio n ("MEMA" ) t o th e Stat e o f California' s illusor

y reques t fo r a waive r t o allo w th e enforcemen

t o f it' s regulation s o

f on-boar d diagnostic s ("OBD" ) systems , 1 3 CC R Sectio n 1968.1 . First , som e background o

n wh o we are . MEM

A i s anationa

l trad e associatio n representin g approximatel

y 75 0 U.S . manufacturer s o f moto r vehicl e components , replacemen t parts , accessories , automotiv e chemical s an d ca r car e product s an

d relate d equipment . MEM A manufacture

r member s sell thei

r product s t

o the vehicl e manufacturer s a s origina l equipmen t an d t o the independen

t aftermarke

t fo r us e i n th e repai r an d servicin g o

f moto r vehicle s fro

mpassenge

r car s an d light-dut y vehicle s t

o heavy-dut

y trucks . I . Timin g o

f Waiver Reques t A s we ope

n ou r testimony , w

e thin k i t i s appropriat

e t o reflect o n the timin g o

f thi s hearing . W

e ar e aske d t o comment , today , o

n Octobe r 17 , 1995 , as t

o the appropriatenes s o

f a waive r t o allo w the Californi aAi

r Resource s Boar

d ("CARB" ) t

o enforc e it s regulation s fo r OB D II system s i

n plac e o f the federa l regulation s fo

r suc h systems . A s w e sit

her e today , th e basi c construc t

o f th e OB D I I regulatio n fo

r which Californi aseek s awaive r i s alread y i n effect . CAR

B bega n it s OB D I I rulemaking proces s i

n 1989 . CAR

B ha s require d severa

l o f the provision s o

f it s OB D rul e t o b e incorporate d int o California-certifie d vehicle s sinc e the 199 4 mode l year . Indeed , i

n it s June 14 , 1995 , lette

r t o EP A requestin g thi s hearing , CAR B boast s tha t "severa l manufacturer s were able t o certif y full y complian

t monitorin g systems " i

n the 1994-199 5 mode

l years . For si x years , CAR

B ha s bee n adopting OB D II standards . Fo r tw o mode

l years , CAR B ha s bee n enforcing OB D II standards . Thes e standards , whic h ar e strikingly inconsisten

t wit h thei r federa l statutor y counterparts , hav e bee

n adopted , modifie

d an d enforce d b

y CAR B ove r the las t si x year s withou

t th e benefi t o f awaive r o f federa l preemptio n fro

mEPA , an

d i n direc t contraventio n o

f Sectio n 209(a

) o f th e Clea n Ai r Act .

PHONE : aoa /

393-MEM A FAX : ao a / 737-374 3? * . *

Testimon y o f MEM A a t EP A Hearing o

n Californi aReques t

fo r Section 209(b ) Waive

r Octobe r 17 , 1995 Pag e 2 Th e uninitiate d migh t wonde r ho w i t i s possibl e tha

t EP A ha s allowe d Californi at o enforc e it s regulation s withou t obtainin g awaive

r o f federa l preemption . Section 209(a ) clearly prohibit s an

y stat e fro madoptin g o

r attemptin g t

o enforc e standard s relatin g t o th e contro l o f emission s fro

mne w moto r vehicle s o

r ne w moto r vehicl e engines . I t i s als o clear , fro

mthe languag e o

f Section 209(b) , tha

t th e EP A Administrator

i s expecte d t o enforc e th

e preemptio n standar

d se t fort h i n 209(a) . Th

e Administrator

i s charge d wit h ensurin g that , i

n th e absenc e o

f aSectio n 209(b ) waiver , EPA' s emission s contro l standard s ar

e enforce d a s th e la

w o f th e lan d i n al l 5 0 states . Somehow , th e Administrato r ha s turne d ablin d ey e t

o thi s obligatio n durin g the pas t si x years . Sectio n 209(b ) contain s th e only exceptio n fro

mthe genera

l rul e tha t stat e standard s fo r emission s control s ar

e preempte d b

y federa l standard s fo

r emission s controls . Thi s limite d exceptio n t

o th e genera

l rul e o f preemptio n allow s th

e EP A Administrator

t o waiv e applicatio n o

f enforcemen

t o f Section 209(a

) agains t Californi aif

, after notic e an d opportunit y fo r publi c comment , Californi adetermine s tha t it s standard s ar

e a t leas t a s protectiv e o

f th e publi c healt

h an d welfar e a s the Federa

l standards , an

d th e EP A find s that : (1 ) California' s determinatio n i s no t arbitrar y an d capricious ; (2 ) Californi aneed s the standard s t

o mee t compellin g an

d extraordinar

y conditions ; an

d (3 ) California' s standard s an d accompanyin g enforcemen t procedure s ar

e no t inconsisten

t wit h the requirement s o

f Sectio n 202 . Sectio n 209(b ) manifestl y contemplate s th

e enforcemen

t o f California' s standard s onl y after awaive r ha s bee n granted . The D.C . Circuit ha s state d a s muc

h i n Ford Motor Co. v . EPA, 60 6 F.2 d 1293 , 129

4 (D.C . Cir . 1979) , i

n whic h i t declared : "After

obtainin g awaive

r Californi aca

n enforc e within it s border s it s ow n pollutio n standards. " But despit e th e clarit

y o f the statutor

y directive s an

d cour t interpretation , thi s hearing , o n Octobe r 17 , 1995 , full

y tw o year s afte

r Californi abega

n enforcing it s OB D I I standards , mark s th e firs t

opportunit

y EP A ha s provide d t

o the moto

r vehicl e aftermarke

t t o addres s the inconsistenc y o

f th e Californi arule s wit

h the federa

l statutor y requirements . I n fact , give

n the tremendou s succes s CAR B ha s ha d i n adoptin g an

d enforcin g it s ow n standard s fo

r OB D system s durin g the las t si x years , i n complet e disregar d o f th e inconsistent

requirement s o

f federa l law , an d wit h the taci t approva l o f EPA , mayb e th e greates t surpris e her

e toda y i s tha t CAR B finall y bothere d t

o reques t awaive r hearin g a t all . Indee d thi s hearin g migh

t neve r hav e com e t o pas s a t al l ha d i t not bee n fo r objection s MEM A filed i n EPA' s federa

l OB D Docke

t i n Apri l o f thi s year . I

n thes e objections , an

d i n MEMA' s discussion s wit

h EPA , MEM

A expresse d it s strenuou s oppositio n t o th e EPA

-P. 4

Testimon y o f MEM A a t EP A Hearing o

n Californi aReques t

fo r Section 209(b ) Waive

r Octobe r 17 , 1995 Pag e 3 sanctione d enforcemen

t b y CAR B o f th e OB D II regulation s withou t aSection 209(b ) waiver . MEM A demande d tha

t EP A hold ahearing o

n th e Californi awaive

r reques t an d o n EPA' s pre-waive r proposa l tha t a n OEM' s complianc e wit

h OB D II b e deemed t

o mee t the federa

l OB D standard . . I n May , MEM

A agreed t

o withdra w thes e objection s fro

mth e federa l OB D docke

t i n exchang e fo

r EPA' s promis e t

o hol d thi s hearing , an

d ahearing o

n the Californi aOB D I I deemed-to-comply issu e withi n 3 0 t o 60 days . Ha

d MEM A no t file d thes e objection s an

d forced the issu e wit

h EPA , I doubt

whethe r w e woul d eve n b e her e today , si x year s afte

r Californi abega

n the OB D I I rulemaking process . MEM A ha s hear

d nothing furthe

r fro m EP A abou t it s othe r promis e fiv

e month s ag o t

o hold ahearin g i

n Ma y o r June 199 5 o

n it s decisio n t o allo w California-certifie d car s t o b e deemed t

o compl y wit h federa l OB D standards . W

e ar e extremel y disappointe d b

y the failur

e o f EP A t o hono r it s commitment . Suc h afailur e make s i t les s likel y tha t partie s suc

h as MEM

A wil l be willin g t

o mak e suc h agreement s i

n th e future . California , fo

r it s part , i s apparentl

y unconcerne d b

y th e timing o f it s request . California' s applicatio n fo

r awaive r simpl y glosse s ove

r th e issue s pose d b

y the timin g o

f thi s request . The onl

y mention t

o the timin g o

f CARB' s reques t

i s containe d i

n it s reference s t o technologica

l feasibilit y unde r NRDC v . EPA, 65 5 F.2d 31 8 (D.C . Cir . 1981) , an d International

Harvester

v . Ruckelshaus, 47 8 F.2 d 61 5 (D.C . Cir . 1973) . Here , CAR B contend s tha

t i t ha s me t an y concern s regardin g the technologica l feasibilit y o f the OB D syste mbecaus e i

t gav e notic e t

o vehicl e manufacturer s o

f it s adoptio n o

f thes e standard s i

n Jul y 1989 , i t enforced thes e standard s durin g the 199 4 an d 1995 mode

l years , an d i t ha s alread y coerce d a

t leas t fiv e manufacturer s int

o ful l compliance . CARB' s statement s ignor

e the fac t tha t Section 209(a)' s prohibitio n o n astates' s adoptio n o

r enforcemen

t o f independen

t standard s ha s bee

n i n effec t sinc e CAR

B initiate d th e OB D I I proceeding s i

n 1989 . CAR

B ha d no t received , an

d t o thi s dat e ha s stil l no

t received , an y waive r t o "adopt " o

r "enforce " it s OB D II standard . Since , unde r Section 209(a

) and 209(b) , CAR

B ha d no authorit

y t o "adopt " it s OB D II standar d sinc e 1989 , t o amen

d it s OB D II standar d i n the intervenin g years , o

r t o "enforce " the standar

d i n 199 4 an d 1995 , CARB' s assertio n tha

t the standard' s technologica l feasibilit y i s prove n b y it s successfully-coerce d complianc e wit

h thes e standards , wit

h th e ful l complicit

y o f EPA , i s nothin g shor

t o f arrogant . CAR B canno t bas e it s technologica

l feasibilit y determinatio n o

n it s experienc e i

n th e illega l promulgatio n an

d enforcemen

t o f astat e OB D standar

d ove r the las t si x years . For thi s reaso n alone , th

e waive r reques t shoul d be denied . Tha

t denia l canno t b e rescue d no

wP. 5

Testimon y o f MEM A a t EP A Hearing o

n Californi aReques t

fo r Section 209(b ) Waive

r Octobe r 17 , 1995 Pag e 4 becaus e EP

A ha s failed t

o act whil e CAR

B unlawfull

y force d the OEM s t

o spend the significan t sum s involve d i

n designin g a

n OB D syste

mtha t meet s it s regulations . II . Waive r

Analysi s CAR B contend s tha

t the scop e o

f EPA' s consideratio n o

f thi s reques t

fo r awaive r shoul d b e ver

y abbreviated . CAR

B conclude s tha

t OB D i s no

t astandar d fo r the contro l o

f emissions , bu

t i s simpl y a n "accompanying enforcemen t procedure. " A s such , CAR B argue s tha t acomplet

e waive r analysi s i s unnecessary . CAR B suggest s tha

t EP A conside r only : (1 ) whethe r Sectio n 1968. 1 i s s o la

x i t threaten s th

e validit y o f California' s determinatio n tha t it s standard s ar

e a t leas t as protectiv e o

f the publi c healt

h an d welfar e as federa

l regulations , an

d (2 ) whethe

r Sectio n 1968. 1 i s consisten t wit h Sectio n 202(a

) o f th e Clea n Ai r Act . Eve n i f CAR B wer e correct , the waive

r shoul d be denied . I

n addition , however , MEM A strongly disagree s wit

h CARB' s rational e an

d propose d standar

d fo r the analysi s o

f thi s waive r request . CARB' s OB D II rul e i s no t jus t a n enforcemen

t procedur e —i t set s ane w emission s standard . Sectio n 1968. 1 state s that , unde r the OB D regulator

y scheme , avehicl e will no t be considere d t o b e "malfunctioning, " an d th e OB D syste

mwil l not illuminat e amalfunction indicator ligh t ("MIL" ) o

r stor e afaul t code , unti l the monitore d condition s indicat e tha t the vehicl e exceed s one an

d one-half (1.5 ) time s the applicabl e Californi astandar d fo r vehicl e emissions . I n essence , OB D I I thereb y create s ane w Californi aemission s standar d fo r thes e vehicles . Tha

t standar d i s one an

d one-half (1.5 ) time s th

e existin g emission s standard . Californi avehicle s whic

h excee d the emission s standar d b y les s tha n fift y percen t ar e no t "malfunctioning " vehicle s unde r thi s ne w Californi astandard . The margina l emission s performanc e o

f suc h vehicle s will no

t b e monitore d o

r identifie d b

y th e Californi aOB D I I system . Sinc e Sectio n 1968. 1 ha s the effec t o f creatin g ane

w emission s standard , acomplet e Sectio n 209(b ) waive

r consideratio n i s required . Further , no

t onl y doe s the Californi aOB D syste mset ane w standar d fo r permissibl e vehicl e emissions , th e rul e is itself astandar d whic h require s acomplet

e waive r analysis . Th e OB D systemi s mandate d equipmen t withou t whic h ane w vehicl e canno t

b e certifie d i

n California . Consequently , OB D I I i s no t simpl y atechniqu e which measure s enforcement , but i s itself a"standar

d relatin g t

o th e contro l o

f emission s fo

r ne w moto r vehicle s or

ne w motor vehicl e engines. ", FL6_

Testimon y o f MEM A a t EP A Hearing o

n Californi aReques t

fo r Section 209(b ) Waive

r Octobe r 17 , 1995 Pag e 5 A complet

e Section 209(b ) determinatio n require s EP A t o conside r th e following issue s i n conjunctio n wit

h California' s reques t

fo r awaive r t o allow enforcemen

t o f OB D II : (1 ) whethe r th e Californi aprotectivenes s determinatio n wa s arbitrar y an d capricious ; (2 ) whethe r Californi aha s demonstrate d acompellin g need fo r OB D II ; an

d (3 ) whethe r OB D I I i s consisten

t wit h Section 202 . Th e OB D II regulations , an

d th e tamperin g protectio n provisio n i n particular , fai

l t o mee t an y pron g o f thi s test . A . Th e Californi a Protectivenes s Determinatio n Wa s Arbitrar

y an d Capriciou s O n Thursday , Decembe

r 8 , 1994 , Californi ahel d ahearing o n the OB D II revise d standards . A t tha t hearing , CAR

B boar d members state d tha

t the y recognize d the ne

w regulatio n woul d hav e a n economi c impact

o n the aftermarket , bu

t the y believe d i

t unnecessar

y fo r the m t o conside r how t o lesse

n tha t impact . (Transcrip t

o f Decembe r 8 , 199 4 Meeting Befor

e the Californi aAi

r Resource s Boar

d (hereinafte

r "12/8/9 4 CAR

B Hearing Tr." ) a

t 180-81 , 202. ) Indeed , CAR

B staf f an d boar d member s acknowledged that , a s o f the tim e o f promulgatio n o

f thes e ne w Californi astandards , i

t remaine d unclea

r ho w acces s woul d b e grante d t o allo w aftermarke

t reprogramming o

f the OB D system , an

d ho w muc h discretio n OEM s woul d hav e regardin g aftermarke t access . (12/8/9 4 Hearing Tr . a t 47-52. ) CAR

B staf f maintaine d tha

t i t would b e u

p t o EP A t o issu e regulation s t

o ensur e OB D syste

maccess . (Id ) A t the sam e time , however , CAR

B rebuffe d efforts b

y aftermarke

t an d OE M representative s t o defe

r consideratio n o

f the anti-tamperin g issu e unti l EP A coul d addres s information availability . (I d a t 70 , 143 , 173-74. ) CAR

B ignored the warning s o

f aftermarke

t part s manufacturer s an

d clea n fue l conversio n ki

t manufacturer s tha

t anti-tamperin g provision s would prohibi t

th e necessar

y revers e engineerin g fo

r thes e manufacturer s t

o develop alternativ e component s whic h ar e no t identica l i n specification t

o OE M parts . (I d a

t 179-80 , 213. ) CAR

B furthe r disregarde d the admonition s o f the aftermarke

t servic e industr

y tha t price s will increas e withou t th e competitio n o

f independen

t part s manufactured i

n the aftermarket . (Id . a

t 186. )P. 7

Testimon y o f

MEM A a

t EP A Hearin g o n CaliforniaReques t

fo r Sectio n 209(b ) Waive r Octobe r 17 , 199 5 Pag e 6 Amazingly , CAR B Boar d member s wer e apparentl y unawar e tha t Clea n Ai r

Ac t Sectio n 20 3 contain s anti-tamperin g protection s that coul d b e implemente d t o mee t thei r £ j concern s abou t

OB D syste mintegrity . (I d a t 174-77. ) Further , CAR B refuse d t o allo w thes e <Mj_xS> r federa l anti-tamperin g protection s t o b e give n a n opportunit y t o wor

k befor e CAR B A implemente d it s ow n anti-tamperin g protections . (I d a t 171-77. ) VJ ^ Instead , CAR B insiste d o n adoptin g it s anti-tamperin g provision , whil e relyin g o n EP A t o remed y an y problem s create d b y thi s provisio n in EPA' s acces s an d informatio n availabilit y rulemaking . O f course , EP A i s i

n n o positio n t o remed y th e problem s cause d b y CARB' s anti-tamperin g provisio n sinc e th e Californi arule s requir e encrypting , pottin g an d solderin g th e OB D compute r chip , an d nothin g i

n th e federal rul e addresse s avoidanc e o f suc h limitation s o n access . Therefore , th e recently-release d EP A informatio n availabilit y rulemakin g doe s no t

serv e t o eas e th e difficultie s pose d t o aftermarke t part s an d conversio n ki t manufacturer s b y CARB' s anti-tamperin g provision . Indeed , federa l policy , t o whic h w e hav e objected , permit s vehicl e manufacturer s t o certif y complianc e wit

h California' s OB D rule s at leas t throug h th e 199 8 mode l year , and , i n doin g so , t o avoi d th e federa l OB D rul e whic h doe s no t

no w contai n a

n anti-tamperin g provisio n a s aresul t o f earlie r litigatio n with th e aftermarket . I n ignorin g th e concern s raise d b y OEM s an d al l sector s o f th e aftermarke t

industry , CARB . ha s frustrate d both th e EP A mandate s t o ensur e acces s an d informatio n availability , an d th e inten t

o f Sectio n 202(m ) tha t

th e aftermarke t

participat e in th e maintenanc e an d repai r o f moto r vehicle s wit

h OB D systems . CARB' s ne w standard s fo r OB D system s canno t

possibl y b e a s protectiv e o f th e publi c health an d welfar e a s th e federa l standard s i f thos e standard s ar e no t

writte n in suc h a way a s t o mee t

clea r Congressiona l inten t

regardin g th e protectio n o f th e competitiv e balanc e in th e vehicl e manufacturin g an d servicin g industry . Notwithstandin g th e suggestio n i n MEMA v . EPA, 62 7 F.2 d 1095 , 111 1 (D.C . Cir . 1979) , t o th e contrary , w e strongl y believ e tha t th e publi c welfar e require s consideratio n of matter s beyon d th e environment , especiall y sinc e Congres s specificall y include d Clea n Ai r Ac t provision s t o ensur e aftermarke t

. competitiveness . CARB' s failur e t o integrat e protection s for thi s competitiv e balanc e in it s ne w standard s render s it s protectivenes s determinatio n arbitrary an d capricious , an d require s tha t EP A den y th e waive r

request . California' s protectivenes s determinatio n i s als o arbitrary an d capriciou s becaus e i t faile d t o conside r

th e consistenc y o f

OB D I I wit

h federa l law s beyon d th e Clea n Ai r Act . Specifically , th e tamperin g protectio n provisio n i s unenforceabl e becaus e i t i s preempte d b y th e Semiconducto r

Chi p Protectio n Act , 1 7 U.S.C . § § 900 , et . seq .P. 8

Testimon y o f MEM A a t EP A Hearing o

n Californi aReques t

fo r Section 209(b ) Waive

r Octobe r 17 , 1995 Pag e 7 OB D system s rel

y heavil y o n semiconducto

r chip s as th

e "brains " o

f the system . Th

e tamperin g protectio n provisio n o f th e regulatio n require s OEM s t o us e mechanism s t

o limi t acces s t o thes e chip s b

y soldering , pottin g o

r otherwis e sealing encrypte d chip s within the OB D computer . B y affixin g th e chip s withi

n th e on-boar d compute r i n thi s way , the remova

l o f the chip ca

n b e accomplishe d onl

y throug h th e partia l destructio n o

f the OB D system . However , unde

r Sectio n 27156(b ) o

f th e Californi aVehicl e Code , i t i s acrimina

l violatio n fo

r an y perso n t o "disconnect , modif

y o r alter " an y require d pollutio n contro l devic e o n avehicle , includin g a

n OB D system . A s such , th

e tamperin g protectio n provision s criminaliz e th e attemp t t o acces s a n OB D compute r chip . Thi s criminalizatio n i s no t onl y inconsisten

t wit h the acces s requirement s state d i n the federa

l Clea n Ai r Act , i t i s als o inconsisten

t wit h th e right s specificall

y grante d i n the Semiconductor

Chi p Protectio n Act , 1 7 U.S.C . § § 90 0 et . seq . Tha t Ac t protect s the design o

f asemiconducto

r chi p fro munauthorize d copying . However , t

o ensur e competitio n i

n th e compute r service s industry , Congres s als o specificall y authorize s th e revers e engineerin g o f semiconducto

r chip s t o ensur e compatibility . See 1 7 U.S.C . § 906(a) ; H . Rep . 98-781 , Semiconducto r Chi p Protectio n Ac

t o f 198 4 a t 21-23 . The mos t commo n metho d used t

o revers e enginee

r acompute

r chip involve s th e peelin g o f th e layer s o

f the chi p an d the captur

e o f the structur

e o f eac h laye r o n aserie s o

f photographs . Thi s proces s require s the remova l o f th e semiconducto

r chip fro mit s locatio n i n th e compute r an d the subsequen

t destructio n o

f tha t chip . I n passin g the Semiconducto r Chi p Protectio n Act , the Congres s carefull y weighe d the need s fo r the protectio n o

f intellectua

l property , o

n th e on e hand , an d the need s o

f competitor s t

o obtain information abou

t the working s o

f acompute

r i n orde r t o marke t compatibl e products , o

n the other . I

n strikin g thi s delicat

e balance , the Congres s determine d that , whil e i

n mos t circumstance s the duplication o f the compute

r chip desig n i s prohibited , the right to reverse engineer

tha t chi p design mus t

b e provide d an

d protecte d i

n orde r t o maintain competitio n i

n the compute

r service s industry . Th e anti-tamperin g provisio n o f Section 1968. 1 eviscerate s thi s carefu l balanc e struck b y Congress . B y requirin g potting , solderin g an d encryptio n t

o dete r extractio n an

d tampering , the provisio n considerabl y complicate s the effor

t t o revers e enginee

r acompute

r chip . Further , an

d perhap s mor

e importantly , Section 1968. 1 ha s th e effec t o f criminalizin g the effor t t o extrac t an d revers e enginee

r the chip , a

n effor t tha t i s specificall

y guarantee d unde r federa l law .P. 9

Testimon y o f MEM A a t EP A Hearing o

n Californi aReques t

fo r Section 209(b ) Waive

r Octobe r 17 , 1995 Pag e 8 California' s failur

e t o recogniz e an

d addres s the inheren

t conflic t pose d b y th e requirement s o

f it s stat e la w wit h the dictate s o

f applicabl e federa

l la w render s it s protectivenes s hearin g arbitrar y an d capricious . Becaus e o

f this , an d becaus e the Californi a standar d i s preempte d b

y federa l la w beyon d th e Clea n Ai r Ac t whic h EP A doe s no t hav e the authorit y t o waive , thi s reques t

fo r awaive r shoul d b e denied . B . Californi aHa s Faile d t o Demonstrat e aCompellin g an d Extraordinar y Nee d fo r OB D I I I n it s waive

r request , Californi asummaril y conclude s tha

t i t must need th e ne w standar d set fort h i n Section 1968. 1 becaus e i t ha s aseriou s ai

r pollutio n probleman

d aneed t o achiev e maximu

mreduction s i

n emissions . Certainl

y n o on e contest s tha

t seriou s air pollutio n problem s exis t

i n area s o f California . No

r doe s anyone contes t

tha t thos e problem s ar e cause d b

y uniqu e climacti c condition s exacerbate d b y a n extremel y hig h concentratio n o

f moto r vehicle s which serv e a s the primar y transportatio n sourc e fo

r the state . Nonetheless , i

t i s difficul t t o imagine ho

w California , o

r th e EPA , ca

n reach th e determinatio n tha

t the stat e ha s a"compelling an

d extraordinary " nee

d t o implemen

t OB D I I t o achiev e necessar

y emission s reductions . Th e stat e ha s ye t t o full y implemen

t it s Stat e Implementatio n Pla

n o r "SIP" , includin g it s I/

M Program , as mandate d b y Sectio n 182 o

f th e Clea n Ai r Act . Californi aha s historically relie d o n technology-forcin g solution s t o reduc e mobil e sourc e emissions . However , the Clea n Ai r Ac t Amendment s o

f 1990 adde d ane

w provision , Sectio n 182 , tha

t establishe d amen

u o f prescriptiv e mandate s fo

r non-attainmen

t areas . Thes e mandate s var

y dependin g o

n th e severit

y o f non-attainment . It

i s clea r fro mth e legislativ e histor

y tha t California' s uniqu e problem s wer e considere d by th e Unite d State s Congres s whe

n thes e provision s wer

e developed . Representativ e Henr

y Waxma n (D-CA) , wh

o was the voic e an

d conscienc e o

f Californi adurin g th e Clea

n Ai r Ac t Amendmen

t deliberations , full

y supporte d th e Sectio n 182 mandates . Indeed , all bu

t fou r o f the member s o

f the Californi aCongressiona l delegatio n vote d fo r th e Clea n Ai r Ac t Amendments , mindfu

l o f the Section 18

2 provisions . Sectio n 182 require s enhance d inspectio n an d maintenanc e o

f moto r vehicles . ,EP

A ha s implemente d thi s requiremen t i n aprogra mcalle d I/

M 240 . EP

A ha s als o gon

e o n th e recor d t o identif y enhance d I & M a s the mos t cost-effectiv e mean s t

o reduc e mobil e sourc e ai r pollution , a

t onl y $50 0 pe r ton . T o date , Californi aha s rejecte d implementatio n o f a n I/ M 24 0 Program , an

d it s SIP contain s n

o plan s t o adopt the program .P.1 0

Testimon y o f MEM A a t EP A Hearing o

n Californi aReques t

fo r Section 209(b ) Waive

r Octobe r 17 , 199 5 Pag e 9 Sectio n 18

2 als o require s th

e stat e t o undertak e transportatio n contro l measure s i n it s most seriou s non-attainmen

t areas . Transportatio n contro l measure s ar e no t par t o f California' s SIP . I

t appear s tha

t Californi acurrentl

y ha s n o plan s t o mee t it s statutor

y obligatio n t

o compl y wit h thi s provisio n either . W e ar e awar e tha t Californi areache d agreemen t wit h EP A t o avoid sanction s fo

r no t implementin g a

n I/ M 24 0 Program . Instead , i n Januar y o f thi s year , Californi achos e t o adopt it s ow n hybri d program , whic

h wil l no t be full y operationa

l unti l 1997 , eve

n a t the ris k o f losin g ful l SI P credit . I n hi s June 30 , 1995 , lette

r t o EP A Administrato

r Browne r introducin g the I/

M Program , California' s Secretar y fo r Environmenta

l Protectio n characterize d the progra ma s "innovative" , wit

h "strong ~ an

d unprecedente d - enforcemen t an d accountability " an

d "wit h emission s reduction s guarantee d unde r stat e law. " Based o

n the significan

t emission s reduction s anticipate d b

y the I/ M program , Secretar

y Stroc k requeste d "ful

l credit " fo

r thes e reduction s unde

r the Californi aSIP . However , base d o n EPA' s ow

n standard s fo

r enhance d I/ M programs , includin g recen t revisions , th

e Californi apla

n wil l no t mee t th e tes t fo r ful l SI P credit , an

d wil l fai l t o compl y wit h the enhance d I& M requirement s o f Sectio n 182 . Give n th e Secretary' s expresse d optimis mabou t the abilit y o f the I/ M Progra mt o achiev e significan

t emission s reductions , i

t seem s incongruou s tha

t the stat e no w seek s a waive r o f Clea n Ai r Ac t standard s t

o enforc e a

n entirel y differen t OB D II progra

mo n th e ground s o f "compellin g an

d extraordinary " need . I

f the I/ M Progra mi s as innovativ e an

d effectiv e as Secretar

y Strock represents , an

d i f i t is , i n fact , full y implemented , i

t ma y wel l obviat e th e need fo

r Californi at

o hav e a n OB D syste

mwhic h i s separat

e fro man d inconsisten

t wit h federa l requirements . A t least , California' s I& M Progra mshoul d b e implemented , an d it s result s measure d an d compare d wit

h the hig h expectation s fo

r it s performance , before California , an d th e EPA , conclude tha

t a n "compellin g an

d extraordinary " need require s tha t i t enforc e an

d maintai n a separat e OB D standard . Ho

w ca n Californi adetermine , a

t thi s stage , tha

t it s SIP an

d I/ M Progra mar e inadequat

e t o addres s California' s ai r pollutio n problem ? Further , ho

w ca n CARB , o

r EPA , justif

y th e state' s reques t

fo r awaive r o f federa l emission s requirement s t

o allo w enforcemen

t o f OB D I I o n the ground s o

f "compellin g an

d extraordinary " need whe

n Californi aha s failed t o implemen t the availabl e technolog y mandate d fo

r it s us e unde

r the Clea n Ai r Ac t Amendments ? Th

e specia l exceptio n t

o preemptio n availabl e t

o Californi aunde

r Section 209(b ) cannot

b e used a s asubstitut

e fo r complianc e wit

h the mandate s o

f Section 182 . Absen

t tha t compliance , Californi aha s no basi s fo r claimin g "compelling an

d extraordinary " nee

d fo r aSection 209(b ) waiver .P.1 1

Testimon y o f MEM A a t EP A Hearing o

n Californi aReques t

fo r Section 209(b ) Waive

r Octobe r 17 , 1995 Pag e 1 0 Californi aha s als o faile

d t o demonstrat

e "compelling an

d extraordinary " nee

d i n anothe r area . Ther

e ha s bee n n o explanatio n b

y CAR B a s t o whethe r th e anti-tamperin g technique s mandate d ar

e vitall y necessar y t o mee t unique Californi aconditions . Indeed , CAR B apparently see s it s anti-tamperin g provision s as awa y t o assis t the stat e i n avoidin g it s Sectio n 182 mandat

e fo r enhance d I&M . Further , ther

e ha s bee n n o demonstratio n o

f asubstantia

l threa t t o the OB D system integrit y which require s employmen t o f suc h methods , especiall

y i n ligh t o f the tamperin g prohibitio n protection s provide d i n Section 20 3 an

d the acces s an

d information availabilit

y mandate s o

f Sectio n 202(m) . I

n fact , MEM

A worked wit

h Congres s durin g the developmen t o f th e Clea n Ai r Ac t Amendment s o

f 199 0 t o expand th

e anti-tamperin g protection s b y providin g the governmen

t broade r powe r fo r enforcemen

t o f emission s tampering . Californi aha s failed t

o sho w a n "compelling an

d extraordinary " nee

d fo r the OB D I I standar d an d fo r the anti-tamperin g provision s containe d withi n tha t standard . A s such , Californi afail s t

o mee t the second prong o

f th e Section 209(b ) waive

r test . The waive

r shoul d b e denie d o

n thi s basis . C . Sectio n 1968. 1 I s Inconsistentwit h Sectio n 20 2 o

f th e Clea n Ai r Ac t The thir d prong o f th e Section 209(b ) analysi s i s whethe r the Californi astandar

d fo r which waive

r i s sough t i s consisten

t wit h the provision s o

f Sectio n 202(a

) o f th e Clea n Ai r Act . Thi s pron g i s a

n essentia l consideratio n eve

n i f OB D I I i s determine d t o b e a n enforcemen

t procedur e rathe r tha n astandard . The analysi s her e dictate s tha

t OB D n , an

d it s tamperin g protectio n provisio n i n particular , canno t

mee t thi s test . Sectio n 202(a

) provide s the EP

A Administrator

wit h genera l authorit y t o promulgat

e regulation s unde

r th e subsection s o

f Section 202 , subject

t o the provision s outline d therein . Unde r the Sectio n 209(b ) waive

r analysis , the EP

A Administrator

mus t conside r whethe r a Californi astandar

d fo r whic h waive r i s sough t i s consisten

t wit h the regulator

y authorit y provide d t o the Administrator unde r Section 202(a) . I

f the Administrator

would b e specifically prohibite d fro

missuin g the regulatio n pursuan t t o he r authorit y unde r Sectio n

. 202(a ) becaus e o

f asafeguar

d provide d i

n Section 20 2 fo

r aprotecte d clas s o

f businesses , the Californi astandar

d mus t b e deemed inconsisten

t wit h Section 202(a) . Th e D.C . Circui t

addresse d precisel

y thi s issu e i

n AMC v . Blum. 60 3 F.2 d 978 , 98 1 (D.C . Cir . 1979) . I

n tha t opinion , th

e appellat e cour t vacate d the Administrator' s decisio n t o gran t awaive r t o aCaliforni aregulatio n whic h denie d implementatio n lea d tim e specifically provide d i n Sectio n 202(b)(1)(B ) fo

r smal l volum e OEMs .P.1 2

Testimon y o f MEM A a t EP A Hearing o

n Californi aReques t

fo r Section 209(b ) Waive

r Octobe r 17 , 199 5 Pag e 1 1 The EP A opposed AMC' s claimtha t Californi acould no

t obtain awaive

r fo r enforcemen

t o f astandar d tha t was inconsisten

t wit h Section 202(b) . Th

e EP A argue d tha

t th e Californi aregulatio n di d no t nee d t o be consisten

t wit h Section 202(b ) bu

t onl y wit h th e provision s o

f Sectio n 202(a) . Th

e D.C . Circuit

foun d tha t th e EP A was mistake

n i n it s overlitera l interpretatio n o

f the consistenc y criteri acontaine d i n Section 209(b) . Th

e cour t hel d tha t th e correc t interpretatio n o

f th e consistenc y criteri ao

f Section 209(b ) i s tha

t i t require s EP A t o incorporat

e int o Section 202(a

) congressiona

l mandate s containe d i

n the othe r subsection s o

f Section 202 . Th

e cour t conclude d tha

t acontrar y interpretatio n would permit the frustratio n o

f aspecificall

y stated Congressiona

l purpose . Similarly , here , th

e consistenc y criteri ao

f Section 209(b ) must

b e interprete d a s requirin g the consistenc y o f the Californi astandar

d wit h th e congressiona

l mandate s i

n Section 202(m) , no

t jus t thos e containe d i

n Section 202(a) . Congres s include d i n Sectio n 202(m ) carefull y tailore d provision s t

o protec t th e viabilit y o f the aftermarke

t b y ensurin g tha

t acces s an d information regardin g the operatio n o f the OB D syste

mwas provide d t o aftermarke t businesses . Section s 202(m)(4) , 202(m)(5) , 4 2 U.S.C . § § 7521(m)(4) , 7521(m)(5) . I n offerin g the amendmen

t tha t i s th e predecesso

r t o Section s 202(m)(4 ) an

d 202(m)(5 ) o f th e Clea n Ai r Act , then-Senator

Gor e stated : [I] n a n effor t t o mak e certai n tha

t w e d o no t inadvertentl

y curtai l avehicl e owner' s righ

t t o choos e wher

e h e o r sh e pay s t o hav e thei

r ca r o r tmck repaired , no

r thwar t competitio n i

n th e repai r industry , I a

mtoda y offerin g a n amendmen

t tha t would requir

e EP A t o adopt rule s prio r t o the introductio n o

f thes e [OBD ] system s tha

t ensur e acces s an

d eas e o f us e fo r al l thos e engage d i n vehicl e service , diagnostic s an d repair . . . . [an

d t o prevent] th

e creatio n o

f a servic e monopol

y fo r th e manufacturer s an

d thei r dealerships , leadin g t o unnecessar

y waitin g period s an

d increase d repai

r cost s fo r the consumer . 13 6 Cong . Rec . S3271-7 2 (dail y ed . Mar . 27 , 1990

) (statemen

t o f Sen . Gore) . The Hous e Committe e Repor

t issue d afte

r th e Gor e Amendmen

t wa s incorporate d int

o Sectio n 202(m ) als o reflect s thi s sentiment . I t states : The requiremen

t tha t acces s t o emissio n contro l diagnosti c system s b e standardize d i s intende d t

o assur e tha t the emissio n contro l diagnosti c system s produc e information whic

h wil l b e widel y accessible , an

d ca n therefor e b e expecte d t o b e mor e widel y utilize d an

d t o .. . . assur

e tha t manufacturer s ar

e no t abl e t o us e suc h diagnosti c system s t

o achiev e a

n effective monopol

y o n automotiv e servicin g b

y designin g system s tha

t ca n onl y be accesse d a

tTestimon

y o f MEM A a t EP A Hearing o

n Californi aReques t

fo r Section 209(b ) Waive

r Octobe r 17 , 1995 Pag e 1 2 franchise d dealers . . . . Thi s i s importan t fo r acompetitiv e aftermarke

t servicin g industr

y i n whic h independen

t automotiv e repai

r facilitie s wil

l hav e equa l acces s t o all diagnostic s systems . H.R . Rep . No . 101-490 , 101s t Cong. , 2 d Sess . 30 6 (1990) . Congres s carefull

y considere d the proprietar y need s o f th e automobil e manufacturer s an d the economi c need s o

f the aftermarke

t industr y i n concludin g tha

t OB D syste

maccess , eas e o f us e an d information availabilit

y wer e necessar y t o ensur e acompetitiv e marketplace . 13 6 Cong . Rec . S327 2 (dail y ed . Mar . 27 , 1990

) (colloqu y betwee n Senator s Gor

e an d Baucus) . Whe

n Congres s ha s carefull

y crafted legislatio n strikin g adelicat e balanc e betwee

n competin g interes t

groups , neithe

r EP A no r astat e seekin g awaive

r o f federa l preemptio n ha s th e authorit

y t o disregar d thes e dictates . The tamperin g protectio n provisio n se t ou t i n Section 1968. 1 doe s jus t this . Th e Californi aprovisio n require s tha t "computer-code d engine operatin g parameter s shal l not b e changeabl e withou

t the us e o f specialize d tool s an

d procedure s (e.g. , soldere d o r potte d compute r components). " Th

e provisio n als o require s tha t th e manufacturer s "emplo

y proven method s t o dete r unauthorize d reprogrammin g . . . includin g dataencryptio n .. . an d writ e protec t feature s requirin g electroni c acces s t o a n off-sit e compute

r maintaine d b

y the manufacturer. " Thes e provision s stan

d i n marked contras t

t o the Congressiona

l mandate s containe d i

n Sectio n 202(m)(4) . Sectio n 202(m)(4 ) require s tha t acces s b e "standar

d an d unifor mo n all moto r vehicles; " "unrestricte d an d shall no t requir e an y acces s cod

e o r an y devic e which i s onl y availabl e fro

mth e manufacturer; " an

d "usable withou

t the need fo

r an y uniqu e decodin g informatio n o

r device. " The Californi astandar

d clearly violate s all o

f thes e requirements . Acces s t o OB D systeminformatio n unde

r OB D U will b e fa

r fro m"unrestricted. " Th

e soldering , pottin g and encryptio n technique s require d b y the tamperin g protectio n provisio n wil l ensur e that . Further , unde

r th e Californi astandard , the outpu t dataprovide d b

y the OB D systemwil l not b e usabl e without

uniqu e decodin g information whic h i s onl y availabl e fro

mth e manufacturer . Th e Californi atamperin g protectio n provisio n specificall y direct s tha

t reprogrammin g wil l requir e .electroni c acces s t

o a n off-sit e compute r maintaine d b

y the manufacture

r an d tha t the OB D compute

r chip s b e encrypted . A s such , the Californi astandar d mandate s tha

t acces s an d uniqu e decodin g information i s availabl e onl y fro mth e manufacturer , as expressly prohibite d b

y Sectio n 202(m)(4)(B) .P. M

Testimon y o f MEM A a t EP A Hearing o

n Californi aReques t

fo r Section 209(b ) Waive

r Octobe r 17 , 1995 Pag e 1 3 I n addition , CAR

B Mail-Ou

t No . 95-2 0 clarifie s tha

t OB D II syste

mfaul t code s will no t be standar

d an d uniform . Th

e mail-ou t contemplate s th

e prevalen t us e o f manufacturer

specifi c faul

t code s - the ke

y t o whic h wil l clearl y als o be availabl e onl

y fro mthe manufacturer . Further , CARB' s allowanc e o f multitudinou s faul

t code s b y eac h an d ever y OE M considerably complicate s the efforts o f th e aftermarke

t t o participat

e i n th e maintenanc e an

d repai r o f moto r vehicles . Will eac

h servic e statio n be require d t o maintain alibrar

y o f volume s containin g th

e key s t o th e manufacturer-specifi c faul t codes ? Wil

l ne w code s b e regularl y added an

d distribute d t

o th e aftermarket ? Ho

w wil l thos e code s b e indexed ? Will thes e manufacturer-specifi c faul t code s b e employed b

y OEM s t o defea t th e us e o f generi c vehicl e components ? Clearly then , the CAR

B regulation s succeed "i

n violatin g bot

h th e lette r o f Sectio n 202(m ) an d the inten

t o f tha t sectio n as well . Unde

r CARB' s OB D II , the unrestricte d acces s an d eas e o f us e o f the OB D syste

mcontemplate d b

y Congres s cannot

be achieved . Further , the information availabilit y mi e promulgate d b

y EP A t o mee t th e requirement s o

f Sectio n 202(m)(5 ) doe s no t resolv e th

e acces s an

d eas e o f us e problem s create d b y the CAR

B mie . Th

e focu s o f th e EP A mlemakin g was simpl

y t o requir e the provisio n b

y th e OEM s o

f th e information necessar

y t o rea d faul t code s i n vehicle s wit

h OB D systems . The mlemakin g doe s no t addres s th

e acces s need s o

f part s manufacturer s o

r conversio n ki

t manufacturers . The fac t tha t the OEM s hav e promise d t o provid e thei r part s specification s t o th e aftermarke t doe s not resolv e the dilemma , either . Congressionally-intende d acces s t o th e OB D syste

mremain s necessar

y fo r part s an d conversio n ki

t manufacturer s t

o design , tes t

an d produc e alternativ e component s whic h ar e no t identica l t o O E component s an

d whic h will no t trigge r amalfunction indicator

light . Withou

t thi s relief , th e aftermarke

t canno t b e ensure d a

n equa l footing i n the competitiv e marke

t fo r th e provisio n o

f vehicl e equipmen

t an d services . The EP A canno t gran t awaive r whic h wil l allo w Californi at

o legall y enforc e a provisio n which i s i

n direc t contraventio n o

f the federa l mandates . T o paraphras e fro mAMC v. Blum, i f EP A di d gran

t suc h awaiver , the

n "an y state , b y adopting the standard s establishe d b

y Californi aunde

r it s waive r fro mEP A ma y den y [t o th e aftermarket , the access ] which Congres s ha s foun d t o b e necessary . [EPA] mus t reject a n interpretatio n tha

t woul d permit

suc h afmstratio n o

f congressiona

l purpose . [Congressiona

l mandates ] canno t b e obviate d b

y waiver. " 60 3 F.2d a

t 981 .P.1 5

Testimon y o f MEM A a t EP A Hearin g o

n Californi aReques t

fo r Section 209(b ) Waive

r Octobe r 17 , 1995 Pag e 1 4 The inconsistenc y betwee

n th e Californi aan

d federa l mandate s fo

r tamperin g protectio n an

d unrestricte d acces s als o cause s th e Californi astandar

d t o fai l th e EPA' s often

state d tes t fo r 202(a ) consistency . According t o thi s test , California' s standard s an d accompanyin g enforcemen t procedure s ar

e inconsisten

t wit h Section 202(a

) if : (1 ) ther e i s inadequat e lea d tim e t o permit th e developmen

t o f technolog y necessar

y t o mee t thos e requirements , givin g appropriat e consideratio n t

o th e cos t o f complianc e withi

n tha t tim e frame , o r (2 ) th e federa

l an d Californi ates t

procedure s impos e inconsisten t certificatio n requirement s so as to make a manufacturer unable to meet

both sets of

requirements within the same test

vehicle. See, e.g., 4 6 Fed . Reg . 26371 , 2637 3 (Ma y 12 , 1981) . The inconsisten

t requirement s imposed b

y Californi afo

r tamperin g protectio n an

d b y Congres s fo

r unrestricte d acces s canno t b e me t o n the sam e tes t vehicle . Becaus e thes e conflictin g tamperin g protectio n an d uninhibite d acces s requirement s canno t b e me t o n a singl e tes t vehicle , th

e Californi astandar

d mus t be deeme d fatall y inconsisten

t wit h Sectio n 202(a ) an d canno t be grante d awaive

r o f federa l preemption . Consequently , EP A canno t allo w OEM s complyin g wit h th e Californi astandar

d an d implementin g it s tamperin g protectio n provision s t

o b e deemed t

o compl y wit h federa l OB D regulation s a s well . A s the D C Circui t

held i n Ford v . EPA "[I

t i s implausible ] tha

t Congres s intende d t

o mak e standard s adopte d b

y Californi afo

r it s ow n particula r problems , an

d neve r substantively reviewe d fo

r stringenc y or

nationa l protectivenes s b

y federa l officials , a

n optio n whic

h aut o manufacturer s ca

n choos e i n the res t o f the countr

y as a n alternativ e t

o complianc e wit

h th e federa l standard s which Congres s determine d ar e i n the bes t interest s o

f th e nation. " 60 6 F.2 d a t 1301-02 . EP A doe s no t hav e the authorit

y t o delegat e it s mlemakin g responsibilit y fo r al l fifty state s t o th e Stat

e o f California . Similarly , th e Stat e o f Californi adoe s no t

hav e th e authorit

y b y virtu e o f awaive r o f federa l preemptio n t

o adopt emission s standard s whic

h fmstrat e nationa l policie s enacte d b

y statut e i n federa l law . California' s OB D I I mi e i s no t mor e protectiv e o

f th e publi c healt

h an d welfar e tha n the Clea n Ai r Ac t emission s requirements , i s no t justifie d b

y a"compellin g and extraordinar y need, " an d i s inconsisten

t wit h Sectio n 20 2 o

f th e Clea n Ai r Act . A s such , i

t fail s t o mee

t an y o f th e criteri ase

t fort h i n Section 209(b ) fo

r awaive r o f federa l preemption . Consequently , California' s waive r reques t must be-denied .